Committee of Supply debate: Ministry of Finance

Will GST be raised by end of 2020?

Mr Low asked whether there are other forms of revenue the Government can look at, such as revenue from land sales.
Mr Low asked whether there are other forms of revenue the Government can look at, such as revenue from land sales.

Workers' Party chief Low Thia Khiang (Aljunied GRC) yesterday asked Second Finance Minister Lawrence Wong whether GST will be raised. Here is an extract of the exchange.

Mr Low: Will the Government raise GST before the end of this decade? Does the minister agree that GST vouchers do not fully offset the amount of GST paid by lower-income households?

Mr Wong: As the Finance Minister said, we are studying all revenue options. Let's not jump to the conclusion of which particular tax is going to be increased or when. The point is that we are preparing ahead, and we're studying and keeping our options open at this time. GST is a progressive tax, the way we have designed it. It's not a question of whether its offsets are sufficient to cover everything that the low income has to pay - but it's the overall progressivity of the system. And the way we have designed the GST with a permanent voucher is to make it a progressive consumption tax.

We have had many debates in this House about this particular design feature of our GST system. More fundamentally, on this issue we have to ask ourselves, and I think, ask Mr Low, these two questions.

First, despite our best efforts to be prudent in spending, do we agree that our long-term expenditures are going to go up, particularly in areas like healthcare with a population that is ageing rapidly? And with huge infrastructure requirements that we do need to put in place to prevent our basic infrastructure from deteriorating and decaying, do we agree that these long-term expenditures are going to go up?

Second, if we agree that long- term expenditures are going to go up, is it not proper and responsible and prudent for the Government to start thinking ahead of what these expenditure needs are, and preparing for all options and studying the revenue options that we need to prepare for this eventuality?

Mr Low: Are there other forms of revenue that we can look at, for instance, revenue from land sales which my colleague spoke of during the Budget debate?

Mr Wong: I believe the Finance Minister had explained that land sales revenues go into our past reserves. So unless the Workers' Party would like the Government to use past reserves, then this option is not going to be made available.

A version of this article appeared in the print edition of The Straits Times on March 08, 2017, with the headline 'Will GST be raised by end of 2020?'. Print Edition | Subscribe